Group retained profits-group accounts, Financial Accounting

Group retained profits

Retained profits ideally should be the amounts that can be distributed as dividends. Therefore, in arriving at group retained profits, careful attention should be paid to the profits of the subsidiary company. All the profits of the holding company can be distributed or are distributable.

However, the subsidiaries profits belong to both the holding company and the minority interest. Thus the share that belongs to the minority interest will be transferred to the Minority interest’s account.

The remaining profits that belong to the holding company should be split between pre-acquisition profits and post acquisition profits.